The productivity problem, plus a simple change that Australian businesses can make to help solve it

Productivity is a hot topic right now. Across Australia, everyone from business managers to the nation’s chief economists are talking about. And for good reason. When productivity wanes, living standards suffer. On the flip side, when productivity grows, so too do a whole raft of other outcomes—from job satisfaction to bottom line benefits. 

Zooming out, there’s room for improvement

As a nation, Australia is currently performing poorly in the productivity stakes. In March, the Productivity Commission went so far as to say this: “It is no secret that Australia is in the midst of its worst labour productivity growth on record.” Ouch. And, according to a recent article in the Financial Review, among a field of 31 “rich” countries, Australia experienced the fifth-lowest rate of productivity growth over the past decade. Double ouch.

The nation’s flatlining productivity is not “new” news. Back in 2023, the Treasurer predicted that Australians could be 40% poorer and will work 5% longer weeks by 2063 if weak rates of productivity growth are not fixed. Indeed, it was a problem pre-pandemic; and it remains a problem today. But it’s certainly something that can be fixed.

Earlier this year, the Head of Economic Analysis at the Reserve Bank of Australia, Michael Plumb, gave a speech on why productivity matters. Before diving into the relationship between productivity, supply, income, and consumption, he offered a great definition of what productivity actually is. “When we talk about productivity, we’re talking about how much output we get relative to what we put in. At an individual level, I increase my own productivity by making a shopping list before I buy groceries, so I don’t forget anything and avoid multiple trips to the supermarket. At the firm level, productivity might be improved by implementing customer relationship management software to streamline communication with clients and automate routine tasks.”

And he then said this: “Productivity is not about working harder, but working smarter.” 

Zooming in, businesses can take the lead

Yes, productivity is a problem at the national level. But it’s also a big issue in business. And it’s here, by working smarter, that it can most easily be solved. 

See, every business has an opportunity to turn inefficient, manual, and time-consuming administrative processes around. Such processes—which are essentially like microeconomic inefficiencies—divert skilled labour away from value-adding work. On their own, they may feel insignificant. But their costs can quickly add up.  

Take contract management as an example. Contracts are the heartbeat of businesses; and managing them is a critical administrative function that, when poorly handled, can impose substantial hidden costs, drain resources, and directly impede productivity, particularly among white-collar workers. It’s so costly, in fact, that Docusign and Deloitte estimate that AUD$3.13 trillion of global economic value is destroyed each year by inefficient agreement processes and systems.

That is a lot of money down the drain. On the flip side, 77% of high-performing organisations (that is, those that outperformed their financial goals) credit agreement management software, tools, and workflows with their success in core areas of their business. More specifically, 74% of high-performing organisations experienced an uptick in productivity by implementing agreement management tools.

In other words, if you leave contract management as a manual process, it hampers productivity and negatively impacts your bottom line. But if you transform contract management into an efficient, automated process, you’ll reap tangible business benefits. 

Boosting productivity is a team sport

As the Labor Government looks to restore confidence and economic momentum post-election, every business can also play its part by tackling entrenched productivity problems head-on and freeing up workers’ time to focus on growth.

To learn more about the positive impact that transformative tools like AI and intelligent agreement management have on organisational productivity and performance, read the latest Deloitte and Docusign report, Optimising Agreement Management.